Spam email gang shut down by investigators

A pair of hackers thought to be responsible for up to a third of all spam emails has been shut down by investigators.

By Jon Swaine

11:27AM BST 16 Oct 2008

Authorities in the US and New Zealand have frozen the assets of Lance Atkinson and Jody Smith, of the HerbalKing group, and taken out restraining orders preventing them from continuing business.

They are accused of bombarding internet users with emails about penis enlargement, prescription drugs and weight loss through a network capable of sending 10 billion messages a day - or 115,741 every second.

Mr Atkinson, of New Zealand, and Mr Smith, of Texas, are accused of making millions of dollars through the HerbalKing ring, which the US Federal Trade Commission (FTC) says stretched from America to China, via Canada, Australia, India and Russia.

To send the emails, the gang is believed to have used an army of zombie computers - a "botnet" - comprising 35,000 systems belonging to unsuspecting surfers whose machines had been hacked.

Action was taken against the pair under the US's Can-Spam Act, which outlawed the practice of sending large volumes of unsolicited emails. The law requires senders to provide a postal address and provide a means through which recipients can opt-out of further messages.

The FTC also accused the pair of selling medication which was bogus or for which they had no licence. Mr Atkinson was fined $2.2 million (£1.28 million) three years ago for pushing herbal remedies in a similar way.

Prosecutors said that three million complaints had been received about emails thought to have come from the group.

According to some analysts, spam makes up 90 per cent of all email sent. Steven Baker, the Midwest director of the FTC, said the problem was becoming increasingly difficult to deal with."Spammers are more highly organised and more offshore," Mr Baker said.

Richard Cox, the chief information officer for the anti-spam campaining group Spamhaus, said he welcomed the move against HerbalKing, but feared that it would not do much to address the problem's roots.

"What we don't know is whether these guys will risk this happening again," Mr Coz told PC World magazine. "The sort of fines they're going to get are going to be small change, relative to the profits they've made. They can look at a $1 million (£580,450) fine as the cost of doing business."